Oregon health rates

How the rate review process works

The state approves rates for insurance plans purchased by small employers (50 or fewer employees) and individuals who don't get coverage through an employer. The state does not regulate plans of large employers (more than 50 employees), who typically negotiate prices directly with insurers.​

Consumers can sign up to be notified if their insurer requests a rate increase. The email notification provides a link so consumers can comment online during the 30-day comment period.

Not everyone receives the same rate increase. For example, a 3 percent increase overall could mean a 20 percent increase for some and a 10 percent decrease for others. The division looks at how the rate increase will affect various policyholders.​
Insurers must break down administrative costs in detail (for example, what they spend on salaries, commissions, marketing, advertising, and other administrative expenses). The division measures the growth in those costs against the Producer Price Index for the Direct Health and Medical Insurance Carriers Industry to determine if a requested increase is reasonable. ​
Before making a rate decision, the division staff reviews all comments made by the public and a designated consumer group (currently OSPIRG), which submits comments on behalf of consumers.​
Is the company adding benefits or removing benefits?  If so, how much will this affect the cost of the policy?​
The Division of Financial Regulation looks at an insurer’s overall profitability – not just how it is doing in one part of its business. For example, an insurer might seek a significant rate increase in its individual health plan that has been losing money. If the insurer is profitable overall (investment income or other lines of insurance), the division can reduce the amount of the requested increases and require the insurer to take a loss. However, the division is careful about approving rates that will result in an anticipated loss for the insurer. Underpricing policies now can result in big rate increases for consumers later and rates generally must cover medical claims plus the reasonable costs of running an insurer. Plus, the more insurers there are in the market, the more choices consumers have.​​
Federal law requires that insurance companies rebate premiums if they fail to spend at least 80 percent of premiums collected in a state’s small group and individual markets on medical care and quality improvement. Most insurers in Oregon meet or exceed the standard. Most of a health insurance premium goes to pay for health care. Division staff members look at the assumptions that the insurer uses to project future expenses. Part of the increase is due to inflation, which increases based on contracts between insurers and doctors and hospitals, and increased charges for services such as lab tests and diagnostic imaging. Costs also go up when people use more health care or more expensive care. This might be due to an aging population or poor health (diabetes and other chronic diseases).​
After a staff recommendation, the insurance commissioner makes a preliminary decision. The Division of Financial Regulation notifies the insurer of the preliminary decision and posts an explanation of its decision. You can visit this site to look up preliminary decisions. The division also sends an email notice of the decision to consumers who sign up. This email includes a link to the preliminary decision.​​
Actuaries from the Division of Financial Regulation, the consumer group, and the insurer meet to discuss the rate filing and any questions. This is followed by an opportunity for the public to testify. Use this website to see the hearing dates and to stream the hearings from your computer.​
After considering the information provided in the hearing and any additional public comments, the insurance commissioner makes the final decision within 60 business days of the date the rate request is posted on the website.​
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